German Chancellor Angela Merkel on Thursday stressed the importance of media freedom amid a widening scandal over police who obstructed a TV crew at a far-right rally against her.

The incident in Dresden in the former communist east sparked outrage which widened when it emerged the protester at the center of the row was an off-duty police employee.

Merkel, speaking during a visit in Georgia, stressed her "strong commitment to press freedom" and said that, while the right to free assembly is equally important, demonstrators must accept that they may be filmed by media organizations.

The angry dispute started a week ago during a Merkel visit to Dresden when a protester marching with the anti-Islam PEGIDA movement argued loudly with a film crew from public broadcaster ZDF.

The demonstrator, wearing a hat in the German national colors, demanded "stop filming me" and wrongly claimed "you're committing an offense" before alerting police who then kept the film crew for questioning for some 45 minutes.

When the footage was posted on social media, it sparked widespread outrage about Saxony authorities restricting the press in a state that is a hotbed for nationalist and anti-immigration sentiment.

The ZDF reporter, Arndt Ginzel, accused police of effectively acting as the "executive" arm of protest group PEGIDA, short for Patriotic Europeans Against the Islamization of the Occident.

- 'Alarming' incident -

Justice Minister Katarina Barley on Twitter called the incident "alarming" and stressed that "the freedom of the press is a precious asset for society and guaranteed by the constitution".

The scandal widened when authorities admitted that the protester was in fact an off-duty employee of the state's police force who works as a paid consultant for economic crime investigators.

Greens Party politician Cem Ozdemir said that "those responsible for the protection of our constitution have no place in organizations and parties that fight against our constitution, even in their spare time."

At the anti-Merkel rally, the hundreds of protesters from PEGIDA and the far-right Alternative for Germany (AfD) had shouted "Merkel must go" and chanted the Nazi-era epithet "Luegenpresse" (lying press).

The movement regards Merkel as a "traitor" for her 2015 decision to keep open German borders to a mass influx of mostly Muslim refugees and migrants fleeing war and misery in Syria, Iraq, Afghanistan and other countries.

The latest incident revived concerns about Saxony which, despite having one of Germany's lowest percentages of immigrants, emerged as the birthplace of the xenophobic PEGIDA movement and a hot-spot for racist hate crimes.

Ralf Stegner, deputy leader of the center-left Social Democrats, charged that Saxony's conservative government "has for decades denied or downplayed radical right-wing sentiment and acts of violence."